What does TikTok have up its sleeve?

The massive social media platform is reportedly making an unlikely entrance into the U.S. fulfillment services market. More than a dozen job listings posted by TikTok over the past two weeks signal that the company is building its own fulfillment centers to handle orders from TikTok Shop, as first reported by Axios.

TikTok Shop is the platform’s e-commerce shopping option, first launched in 2021 in the U.K. It operates in select markets and connects users to products from creators and merchants. The social media app also has an integration with Shopify that allows customers to shop on the marketplace.

But with the potential addition of an American fulfillment network, the company is taking the next step toward creating a seamless e-commerce experience like the one offered by Amazon.

Or is it? Some observers aren’t convinced.

“I believe they can be an e-commerce player but not to the tune they’re thinking now,” said Lee Peterson, executive vice president of thought leadership for WD Partners. “Unless, of course, they change the platform drastically.” 

Others are more bullish, anticipating major growth in TikTok’s e-commerce business.

“TikTok is a content creator’s dream and can deliver views beyond any other medium,” countered Jeff Weidauer, principal of SSR Retail. “Adding necessary logistical tools for delivery will take effort, but it’s very achievable.” 

So which is it? Here’s a breakdown of TikTok’s prospects in the e-commerce fulfillment space.

What TikTok’s fulfillment network might look like

The LinkedIn postings include positions like a logistics solutions manager responsible for planning and designing fulfillment centers and e-commerce logistics solutions. Some roles even mention a global team that would be responsible for a worldwide logistics and warehousing network.

The listings are mainly concentrated around the Seattle area and include descriptions like, “By providing warehousing, delivery and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop.”

TikTok itself declined to comment on the recent job postings, instead emphasizing the company is “focused on providing a valuable shopping experience in countries where TikTok Shop is currently offered across Southeast Asia and the U.K., which includes providing merchants with a range of product features and delivery options.”

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The vagueness of the company’s response so far leaves plenty of room for speculation, but there are a few things known. Like Amazon, TikTok, according to one job posting, plans to use fulfillment centers for inventory management and fulfillment center logistics, including inventory movement across warehouses. 

In another posting, the company mentions that qualified candidates have an understanding of data integration, fulfillment warehousing, first mile pickup, parcel sorting, courier delivery, returns processing and middle-mile deliveries, among other things. The implication is that the platform is exploring all of these options for its U.S. network.

However, as Axios reported, there’s not yet any indication that TikTok is planning to build its own transportation network to go along with its fulfillment centers. That may still happen, but for now, it appears the company will use vendors to handle shipping, consolidation and transportation.

A $37 billion opportunity

TikTok is getting into the thick of social commerce, or shopping done on social media sites. According to Insider Intelligence, the market for social commerce is $37 billion in the U.S., led by Meta. The research also expects that close to 24 million American shoppers will make at least one purchase on TikTok this year, either through an affiliated link or on the platform itself.

If those projections hold firm, TikTok could be knocking on the door of a massive opportunity. What’s more, parent company ByteDance already operates a social commerce marketplace on Douyin, TikTok’s counterpart in the Chinese market.

TikTok has been steadily stepping up its competition with Meta, but ads are likely to remain the platform’s core revenue stream for the foreseeable future. Early struggles haven’t helped to accelerate e-commerce growth. Fr example, it was reported the company’s U.K. live shopping service flopped and even placed an expansion of the service to the U.S. in jeopardy.

However, TikTok’s move to add fulfillment capabilities in America signals confidence within the firm that it can get this right. If it does, it will be tapping into a market that is already huge with plenty of room to grow.

What the experts are saying

Experts and analysts have come out with their early opinions on TikTok’s move — and feelings are mixed. Some, like Neil Saunders, managing director of GlobalData Retail, think adding fulfillment capabilities will help TikTok compete with e-commerce rivals like Amazon and Walmart.

“This would both be an additional revenue stream and would improve the quality of the shopping experience for consumers,” Saunders said. “TikTok has a massive audience and a massive customer base, so it has more than enough demand for this to make sense. Provided TikTok maintains its popularity, it could pose a threat to incumbents and prove to be a highly disruptive force.”

Melissa Minkow, director of retail strategy for software development firm CI&T, added, “Our data shows that consumers consider TikTok to be the best social media platform for both browsing and buying. Working out the logistical side of the product journey is going to be a massive endeavor, but if they actually get it all right, they’ll be in an incredible position.”

Other analysts were not so convinced. Dion Kenney, COO of online retail startup Mondofora, for example, is skeptical that shoppers will take kindly to being sold to where they consume content.

Watch: How to Build A Strong Micro-Fulfillment Model

“TikTok is likely to experience what other social media sites have: users engaged with the media will become disengaged when marketing messages intrude on rich content. People love to buy, but they hate being sold to,” Kenney said.

Wedbush analyst Michael Pachter was more blunt: “It’s idiotic,” he said. “They have no chance of competing, and it is a complete waste of money and time.”

Experts on the side of Kenney and Pachter wonder whether social commerce possesses the staying power TikTok believes it does. They speculate that users won’t be loyal to any one platform and that, ultimately, larger players like Amazon will continue to dominate fulfillment services.

However, if TikTok’s e-commerce business keeps up its current pace, the company could be sitting on a massive opportunity to diversify its revenue stream beyond ads.

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